EU Regulators Analyze ICOs to Shape Regulations

As reported by Reuters on October 8., The European Securities and Markets Authority (ESMA) has declared it is analyzing ICOs to establish their regulations.

The ESMA was founded back in 2011 in Paris. The main idea of the organization is to be objective and develop a shared rulebook for European Union financial markets as well as oversee them. The association is also working with insurance and occupational pensions (EIOPA) as well as the other European Supervisory Authorities proficient in the banking sector (EBA).

The ESMA is evaluating ICOs to see how they obey the already existing securities regulations on a “case-by-case” basis, and also their influence on race in the fundraising field, according to Reuters.

Chair of the ESMA, Steven Maijoor stated that ICOs have had difficult time and struggled to show their practicability as well as what additional benefits they might bring compared with old-fashioned capital increasing. Maijoor continued:

“The subsequent question is what do we do with those ICOs that are outside the regulatory world. We will assess that as a board. We expect to report by the end of the year.”

Chair of the European Authority, Andrea Enria explained that he has thought permitting ICOs to progress without a set of certain E.U. instructions but, “This is not working as expected.”

Enria continued: “Consumer warnings don’t seem to be sufficiently effective in raising awareness among consumers that there is a lack of safety net for these investments”.

The ESMA published earlier this month its 2019 Annual Work Program, where the association mentions 1.1 million-euro program and its aims for the next year, which include the regulation and control handling of new financial activities – centering in crypto assets and fintech.

Last month, the association declared its plan to extend its limitations on contracts for differences (CFDs), including crypto-based ones. The limitations will be improved for another three months on November 1. The ESMA explained its move with “significant investor protection concern” connected to the offering of CFDs retail customers.